How Does the Defined Benefit Plan Work?
The Defined Benefit Plan is a comprehensive plan that provides benefits during your career and in retirement.
Under the Defined Benefit Plan, your retirement income is determined by a calculation that uses:
- Your age,
- Your years of service, and
- Your final average salary (FAS) — the average of your five highest salary years.
Your benefits are created by three sources:
- Your contributions during your career — you currently contribute 14% of your annual salary.
- Your employer’s contributions during your career.
- Investment earnings resulting from those contributions.
Contribution rates are established by law and the State Teachers Retirement Board and are subject to change.
STRS Ohio maintains a diversified portfolio strategically allocated among stocks and fixed income, real estate, international and alternative investments. STRS Ohio investment professionals manage these funds so that benefits are there for you at retirement. This can be an ideal plan for career educators.
What This Means for You
Your monthly benefit is predictable — it does not depend on investment performance.
Plan Features to Consider
Benefits While Teaching
STRS Ohio provides comprehensive benefits and services beyond funding your monthly income during retirement.
You may want to take your retirement assets with you if you leave Ohio public employment before retirement eligibility. While you can leave your account intact at STRS Ohio to qualify for future benefits, your STRS Ohio contributions plus interest can be refunded or rolled over to a traditional individual retirement account (IRA) or another qualified retirement plan. After five years of qualifying service credit, interest plus a 50% match on your contributions and interest is paid on funds withdrawn or transferred.
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.
With 10 years of service credit, you may apply for monthly disability benefits if you become disabled while employed or within one year 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 (medical, dental and vision)* is also available.
Service Credit Purchase
You may be eligible to purchase additional service credit for many types of past employment. This may increase your retirement benefit or enable you to retire early.
Benefits While Retired
Members receive 2.2% of their five-year final average salary for each year of service credit. You are eligible for a benefit at age 65 with five years of service or any age with 32 years of service. The service credit requirements for unreduced benefits at any age will increase to:
|33||years on Aug. 1, 2019|
|34||years on Aug. 1, 2021|
|35||years Aug. 1, 2023–July 1, 2026|
Beginning Aug. 1, 2026, members must be age 60 with 35 years of service to receive an unreduced benefit.
You can retire early with actuarially reduced benefits at age 60 with five years of service or age 55 with 27 years of service. The service credit requirement for early retirement at age 55 will increase to:
|28||years on Aug. 1, 2019|
|29||years Aug. 1, 2021–July 1, 2023|
Members can also retire early with a reduced benefit at any age with at least 30 years of service.
Access to Optional Health Insurance*
You and your eligible dependents will have access to health care coverage (medical, dental and vision) through STRS Ohio provided you have 15 years of service credit. Beginning Aug. 1, 2023, new retirees will need 20 years of service for eligibility.
*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.
With the STRS Ohio Defined Benefit Plan, you receive a monthly benefit payment in retirement based on your age, service credit and final average salary — not prevailing market conditions — and access to health care coverage if you meet health care eligibility requirements. Funds are invested by STRS Ohio investment professionals. Benefits while you are teaching include survivor and disability benefits. This plan may be the best choice for career educators.
If you choose the Defined Benefit Plan now, your decision is permanent. You will not have an opportunity to change STRS Ohio plans at a later date.