Selecting a Plan of Payment

Plans of Payment Available

To plan successfully for retirement, it is important to be familiar with your payment options and to consider your financial needs in retirement.

Your considerations should include:

  • Your health and age at retirement
  • The need for survivor benefits
  • Availability of other financial resources
  • Anticipated financial obligations
  • Reemployment opportunities
  • Potential Social Security benefits
  • Whether or not you are obligated under a court order to select a plan of payment that provides a continuing monthly benefit to a former spouse after your death

At retirement, you must select a plan of payment from among several different actuarially equivalent plans. All plans provide you with lifetime benefits but vary in the benefits provided to survivors. If you are married, please review the spousal consent requirement below.

If a court order requires you to leave a continuing monthly benefit to a former spouse or spouses upon your death, you must submit a copy of the court order to STRS Ohio with your Service Retirement Application. Any amounts payable due to court orders must remain in place during the lifetime of that beneficiary.

There are three basic plans of payment and a Partial Lump-Sum Option Plan.

  • Plan I — Single Life Annuity
  • Plan II — Joint and Survivor Annuity
  • Plan III — Annuity Certain
  • Partial Lump-Sum Option Plan (PLOP)

As you read this section, it may be helpful to refer to the online Service Retirement Benefit Estimate Calculator which will allow you to estimate monthly benefits under the different plans of payment.

Benefits Calculator

The benefits calculator has been created to help you estimate your retirement benefits.

Read the instructions below or click here to go to the benefits calculator now.

  1. Complete each request-for-information field.
  2. To move from field to field, use the tab key or single click on the field box.
  3. The date of birth fields must include month, day and year in the following format:

    Month — Enter a numeric value from 1 to 12.

    Date — Enter a numeric value from 1 to 31.

    Year — Enter a four-digit numeric value (e.g., 1980).

  4. The years of service fields should be completed in the following manner:

    Contributing — Enter your number of years of contributing service at the time of your anticipated retirement.

    Noncontributing — Enter the number of years of noncontributing service credit you have purchased or will purchase prior to your retirement.

  5. Enter your projected final average salary at the time of your expected retirement. (Final average salary is the average of your five highest years of Ohio public earnings. For retirement dates July 1, 2015, and before, the FAS is the average of the member's three highest years of earnings.)
  6. Single click on the “Calculate” button. The benefits calculator will compute an estimate of projected retirement benefits. If an error message appears, follow the instructions for correcting the error.
  7. Click the “X” in the left-hand corner of the window to close the calculator.

Plan I — Single Life Annuity

The Single Life Annuity plan provides maximum monthly benefits for your lifetime. This plan does not provide continuing monthly payments to a survivor.

At your death, if your total monthly benefit payments were less than your contributions, your remaining contributions will be paid to your beneficiary. It takes approximately two to three years of monthly retirement benefit payments to exhaust member contributions. After monthly retirement benefit payments have exceeded member contributions, nothing is payable to a beneficiary.

If you choose a Single Life Annuity plan at retirement and later marry, you may change your plan to a Joint and Survivor Annuity with your new spouse as beneficiary within the first year of your marriage. This is the only circumstance in which you may change a Single Life Annuity plan.

A copy of your marriage certificate must accompany the application to change to a Joint and Survivor Annuity. The new selection is effective on the date the application is received by STRS Ohio and the new benefit amount is paid beginning on the first of the next month.

Plan II — Joint and Survivor Annuity

Under the Joint and Survivor Annuity, you will receive a reduced lifetime monthly benefit. Upon your death, one or multiple primary beneficiaries receive lifetime monthly benefits. There are four options under this plan of payment:

  • Options 1, 2 and 3 apply to a single primary beneficiary (see below).
  • Option 4 applies to multiple primary beneficiaries (see below).

Under this plan of payment, if you and your primary beneficiary(ies) die and the total benefit payments were less than your contributions, the difference will be paid to your secondary beneficiary or your estate.

Single primary beneficiary

  • Option 1:
    Upon your death, the primary beneficiary receives the same monthly benefit you received.
  • Option 2:
    Upon your death, the primary beneficiary receives one-half the monthly benefit you received.
  • Option 3:
    Upon your death, the primary beneficiary receives a specific dollar amount or percentage that you designate. The amount you designate must be at least $50 per month and cannot exceed 100% of your benefit.

If the primary beneficiary is not your spouse, the Internal Revenue Service may limit the percentage of the benefit that you can designate to this person. Contact STRS Ohio for additional information on these limitations.

Under these three Joint and Survivor Annuity options, there are two basic choices.

With reversion: If you select this choice, you may revert to the Single Life Annuity plan of payment if:

  • Your beneficiary dies before you. A copy of the death certificate must accompany the application to revert to the Single Life Annuity plan. The effective date of the new benefit amount is the first day of the month following the beneficiary’s death.
  • Your marriage to the beneficiary terminates, provided that you have written consent from your former spouse or the appropriate court documentation authorizing such a change. The new selection is effective on the latter of the date the application is received by STRS Ohio or the date of divorce. The new benefit amount is paid the first of the next month.

Also, if a Joint and Survivor Annuity with reversion is selected and a non-spouse is named at retirement and you later marry, you may reselect your spouse as the new beneficiary within the first year of your marriage.

Without reversion: With this choice you may never revert to a Single Life Annuity payment. Neither the plan of payment nor the primary beneficiary may be changed after retirement. You maintain this plan of payment even if your beneficiary dies or your marriage to the beneficiary terminates.

With Options 1 and 2 you can select a guarantee feature that provides benefits to a secondary beneficiary for a specific number of years from your retirement date. A guaranteed period is provided at no cost based on the age of both you and your beneficiary. You may extend the guaranteed period by taking a reduction in your monthly benefit amount. The guaranteed period may be any number of years up to an actuarially determined maximum.

If both you and your primary beneficiary die before the end of the guaranteed period, a monthly benefit is paid to the secondary beneficiary for the remainder of the guaranteed period. If you name more than one secondary beneficiary, a lump-sum payment representing the present value of the remaining payments is divided equally and paid to the beneficiaries.

If you or your primary beneficiary outlive the guaranteed period, benefits continue for your lifetime and the lifetime of your primary beneficiary, but the secondary beneficiary would no longer receive benefits.

Multiple primary beneficiaries

  • Option 4: Members may elect to provide continuing lifetime benefits for up to four primary beneficiaries under a Joint and Survivor Annuity. You may specify percentages of your benefit or a flat dollar amount for each beneficiary; however, the total payable to all beneficiaries cannot exceed the amount payable to you.

For example, upon your death, one beneficiary could continue to receive 30% of your benefit, while a second could continue at 20%, and a third and fourth could continue at 10% each. Your benefit will be reduced based on the ages of the beneficiaries and the amount of the survivor benefit provided to each. The percentages designated to beneficiaries do not have to equal 100%.

Unless directed by a court order, you cannot provide a benefit that is less than 10% of the benefit you will receive. If a beneficiary is not your spouse, the Internal Revenue Service may limit the percentage of the benefit that you can designate to this person.

At your death, monthly benefits will be paid to the beneficiaries you designated at retirement. If a beneficiary dies before you, contact STRS Ohio to increase your monthly benefit by the amount of the reduction taken for that beneficiary. Benefit amounts payable to the other beneficiaries after your death will not change.

If you select this choice, you may change your plan of payment only if:

  • One of the beneficiaries is your spouse and your marriage terminates, provided you have written consent from your former spouse or the appropriate court documentation authorizing such a change. The new selection is effective the latter of the date the application is received by STRS Ohio or the date of divorce. The new benefit amount is paid the first of the next month.
  • All beneficiaries are non-spouses and you get married after retirement. Within the first year of marriage, you may reselect a plan of payment with your new spouse as beneficiary. You may retain up to three beneficiaries you selected at retirement; however, the total monthly amount payable to all beneficiaries at your death cannot exceed the monthly benefit paid to you.

Plan III — Annuity Certain

The Annuity Certain plan provides monthly benefits for your lifetime. In addition, your beneficiary receives benefits for a specific number of years from your retirement date. The guaranteed period may be any number of years up to an actuarially determined maximum.

If your death occurs before the guaranteed period ends, your beneficiary receives the same monthly benefit until the guaranteed period expires. If you name more than one person as beneficiary, a lump-sum payment, representing the present value of the remaining payments, is divided equally and paid to the beneficiaries.

If the beneficiary is a legal entity such as a trust, charity or church, then a lump-sum payment of the present value of any remaining payments will be made.

If you outlive the guaranteed period, benefits continue for your lifetime but the named beneficiary no longer receives benefits.

If you choose the Annuity Certain plan at retirement, you cannot reselect a different plan after retirement. However, you may name a different beneficiary for the remaining years on the guaranteed period.

Partial Lump-Sum Option Plan

The Partial Lump-Sum Option Plan (PLOP) allows you to take an amount from six to 36 times the monthly Single Life Annuity (SLA) benefit in a lump sum at retirement. The PLOP must be elected in $1,000 increments, unless the minimum or maximum amount is selected. Monthly benefits still begin with your retirement date and are payable for life, but they are reduced to reflect the amount taken up front in a single payment. A plan of payment for your lifetime retirement benefits — Single Life Annuity, Joint and Survivor Annuity or Annuity Certain — must be selected for determining the remainder of your lifetime benefits.

Spousal Consent

If you are married on your benefit effective date, your spouse must consent to your selection if you have chosen one of the following:

  • Plan I — Single Life Annuity
  • Plan II — Joint and Survivor Annuity
    • Providing your spouse with less than one-half of the benefit, or
    • Providing benefits for a non-spouse beneficiary.
  • Plan III — Annuity Certain
  • Partial Lump-Sum Option Plan (PLOP)
    • Any plan that includes a PLOP payment.

Your spouse may consent to your selection of any of these plans by signing the spousal consent that is part of the Service Retirement Application before a notary public.

Without spousal consent, you will receive a Joint and Survivor Annuity with one-half to beneficiary (with reversion) and no PLOP payment.

Spousal consent is not required if:

  • You are required to elect a plan of payment pursuant to a court order and your current spouse is also a beneficiary under that plan; or
  • You are required to provide an amount to a former spouse or spouses pursuant to a court order or orders that is the maximum amount payable in a Joint and Survivor Annuity plan of payment.

Changing a Plan of Payment After Retirement

After retirement, the opportunity to select another plan of payment depends on the plan chosen at retirement. Only certain circumstances allow this opportunity, as noted below. You should keep these circumstances in mind as you select your plan of payment at retirement.

Single Life Annuity

If you choose a Single Life Annuity plan at retirement and later marry, you may change your plan to a Joint and Survivor Annuity with your new spouse as beneficiary within the first year of marriage. This is the only circumstance in which you may change a Single Life Annuity plan.

A copy of your marriage certificate must accompany the application to change to a Joint and Survivor Annuity. The new selection is effective on the date the application is received by STRS Ohio and the new benefit amount is paid beginning on the first of the following month.

Joint and Survivor Annuity With Reversion

If you select this choice, you may revert to the Single Life Annuity plan of payment if:

  • Your beneficiary dies before you. A copy of the death certificate must accompany the application to revert to the Single Life Annuity plan. The effective date of the new benefit amount is the first day of the month following the beneficiary’s death.
  • Your marriage to the beneficiary terminates, provided that you have written consent from your former spouse or the appropriate court documentation authorizing such a change. The new selection is effective on the latter of the date the application is received by STRS Ohio or the date of divorce. The new benefit amount is paid the first of the next month.

Also, if a Joint and Survivor Annuity with reversion is selected and a non-spouse is named at retirement and you later marry, you may reselect your spouse as the new beneficiary within the first year of your marriage.

Joint and Survivor Annuity Without Reversion

With this choice you may never revert to a Single Life Annuity payment. Neither the plan of payment nor the primary beneficiary may be changed after retirement. You maintain this plan of payment even if your beneficiary dies or your marriage to the beneficiary terminates.

Annuity Certain

If you choose the Annuity Certain plan at retirement, you cannot reselect a different plan after retirement. However, you may name a different beneficiary for the remaining years on the guaranteed period.

Account Withdrawal Option

Upon termination of public employment in Ohio, you may elect to withdraw your account. It is important to understand that withdrawing your STRS Ohio account is not a type of service retirement. Withdrawal of your account will cancel your STRS Ohio membership, your accumulated service credit and your eligibility to qualify for STRS Ohio retirement benefits, including access to health care coverage, if eligible.

Account Withdrawal Restrictions

You cannot withdraw your STRS Ohio account if you are:

  • Under any form of teaching contract including substitute teaching with an STRS Ohio contributing employer;
  • Under any type of verbal or written agreement for future teaching with a board of education or other Ohio employer under the retirement law;
  • On a leave of absence;
  • In the STRS Ohio Defined Benefit Plan and terminated your employment in an STRS Ohio-covered position but are now working with the same employer in an Ohio Public Employees Retirement System (OPERS) or School Employees Retirement System (SERS) position;
  • Currently receiving a monthly service retirement or disability benefit from STRS Ohio; or
  • Currently contributing to a college or university alternative retirement plan. Only a transfer of STRS Ohio funds to the alternative retirement plan is permitted.

Spousal Consent on Account Withdrawal

If you are married and meet the age and service requirements for retirement, you can withdraw your account only if your spouse consents to the withdrawal by signing the withdrawal application before a notary public. If your spouse does not consent, your application for withdrawal shall be considered an application for service retirement paid as a Joint and Survivor Annuity with one-half to beneficiary with reversion.

Monthly Payments vs. Account Withdrawal

Plan Feature Monthly Payments Account Withdrawal
Lifetime monthly benefit Yes No
Survivor benefits Yes No
Access to health care coverage* Yes No
Cost-of-living adjustments Yes No
Direct control over funds No Yes
Possible rollover to a qualified plan No Yes
Possible tax penalties No Yes
Death benefits Yes No
Possible investment costs No Yes
Individual investment risk No Yes
Subject to reemployment guidelines for Ohio public positions Yes No
Receive at least the member contributions you have made to STRS Ohio Yes** Yes***

Note: Any payments you receive from STRS Ohio may affect your eligibility for Social Security benefits. For more information, contact Social Security toll-free at 800‑772‑1213.

*Members who retire on or after Jan. 1, 2004, and before Aug. 1, 2023, must have at least 15 years of service to have access to the STRS Ohio Health Care Program (medical, dental and vision plans). Members who retire on or after Aug, 1, 2023, must have at least 20 years of service to have access to the STRS Ohio Health Care Program.

**You will receive a lifetime monthly benefit and your beneficiary will receive benefits as determined by the plan of payment you select at retirement. Regardless of the plan selected, you will receive at least the individual contributions you have made to STRS Ohio.

***See below for amounts and interest included in the account withdrawal.

Withdrawal Amount

The withdrawal amount consists of your contributions plus an additional amount payable under Section 3307.563 of the Revised Code. The additional amount payable is based on years of qualifying service credit* and the rates of interest established by the Retirement Board. Interest rates are subject to change. For current interest rates, contact us toll-free at 888‑227‑7877.

  • With 5.00 or more years of qualifying service credit, interest at a rate no greater than 6% compounded annually will be paid on your teaching contributions and an additional amount equal to 50% of the sum of your member contributions, plus interest, will also be paid.
  • With at least 3.00 years but less than 5.00 years of qualifying service credit, interest at a rate no greater than 6% compounded annually will be paid on your teaching contributions.
  • With less than 3.00 years of qualifying service credit, interest at a rate no greater than 4% compounded annually will be paid on your teaching contributions.

Interest for all years withdrawn begins to accrue in the fiscal year following deposit. For example, interest on 2018–2019 contributions would begin accruing July 2019 and be payable August 2019 or later. No interest is payable if a member withdraws his or her account in July and contributed to STRS Ohio for only the year just ended. Interest stops accruing the month before account withdrawal.

*Qualifying service credit includes earned credit with STRS Ohio, Ohio Public Employees Retirement System (OPERS) or School Employees Retirement System (SERS); restoration of withdrawn credit with STRS Ohio, OPERS or SERS, interrupted Ohio public service due to military service, and earned and restored credit that transfers from Ohio Police & Fire Pension Fund, Highway Patrol Retirement System or Cincinnati Retirement System.

Important Tax Considerations

If you choose to withdraw your STRS Ohio account, there are important tax implications.

If you choose to have your withdrawal paid directly to you:

  • Your payment will be taxed in the year in which it is issued.
  • STRS Ohio will withhold federal tax at a rate of 20%.
  • If you receive the payment before age 59-1/2, you may have to pay a 10% tax penalty for an early withdrawal.

You may roll over your withdrawal amount to an eligible retirement account that will accept your rollover and:

  • Your payment will not be taxed in the current year and no taxes will be withheld.
  • The funds rolled over will be taxed when removed from the account to which they were deposited.

Beginning in the year you reach age 70-1/2 or terminate employment, whichever is later, a certain portion of your payment cannot be rolled over because it is a "required minimum distribution" that must be paid to you. STRS Ohio can tell you if your payment includes amounts that cannot be rolled over.

There are other tax implications if you withdraw your STRS Ohio account. Review our Account Withdrawal brochure and consult a professional tax advisor for more information. STRS Ohio cannot provide tax advice.

Account Withdrawal Procedures

If you wish to withdraw your STRS Ohio account, call us toll-free at 888‑227‑7877 to request a withdrawal application and an Account Withdrawal brochure or click here to view a PDF version of the account withdrawal packet.