State Teachers Retirement System of Ohio

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Information displayed relates only to the Combined Plan. Click on Defined Benefit Plan or Defined Contribution Plan for information on these retirement plans.

Eligibility Requirements

 

As a Combined Plan member, your effective retirement date for the defined contribution portion of your account is the first day of the month following the latter of:

  • Month in which you become age 50,
  • Last day of actual employment in an STRS Ohio-covered position, or
  • Month in which you apply.

For the defined benefit portion, your effective retirement date is the first of the month following the latter of:

  • Month in which you become age 60, or
  • Last day of actual employment in an STRS Ohio-covered position.

To apply for service retirement, request a Service Retirement Application directly from STRS Ohio at least three months, but no more than 12 months, before your retirement date for either your defined contribution account or your defined benefit account (or both if applicable).

Your employer will be notified of your retirement the latter of when you file your application or two months before your retirement date.

If your fully completed Service Retirement Application is received by STRS Ohio at least 30 days before your retirement date, we may issue a benefit payment on your retirement date. If the actual benefit amount is not calculated by your retirement date, a partial payment may be issued. Most members receive three or more partial payments. Once exact information is available, any balance will be retroactive to your effective date of retirement and paid as a catch-up payment, which is the difference paid to you after receiving partial payments and before your regular payments begin. Benefits are automatically deposited to your bank account on the first banking day of each month.

No partial payments or regular payments will be made if:

  • STRS Ohio is waiting for clarification of a court order providing for payment of a continuing benefit to a former spouse after the member’s death.
  • STRS Ohio is unable to determine service retirement eligibility before we have received information from your employer.
  • You need to purchase service credit to attain service retirement eligibility.

You must file a separate application for the defined benefit and defined contribution portions of your account.

The defined benefit portion of your benefit is final on the 15th of the month after the first regular benefit payment. The defined contribution portion is final on the retirement date.

If you are eligible and enroll in the STRS Ohio Health Care Program, your health care coverage begins on the retirement date for the defined benefit portion or the first of the month after you file your retirement application for that benefit, whichever is later.

For additional information, or if you have questions, contact STRS Ohio toll-free at 1-888-227-7877.

Partial Lump-Sum Option Plan (PLOP) Information

 

STRS Ohio offers a Partial Lump-Sum Option Plan (PLOP) for new retirees in the Defined Benefit and Combined Plans. Click on a topic below to learn more about this feature.

This information is a summary and is not intended to provide complete information about the Partial Lump-Sum Option Plan. For more information contact STRS Ohio toll-free at 1-888-227-7877.

PLOP Definition

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. Monthly benefits still begin with your retirement date and are payable for life, but they are reduced to reflect the amount taken in a lump sum. 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 benefit.

The one-time lump-sum payment may:

  • Be directly rolled over into a traditional individual retirement account (IRA), a Roth IRA, an eligible employer plan or another qualified plan.
  • Be paid to you through direct deposit to a financial institution named at retirement. The payment will be subject to any federal taxes, state taxes and penalties due. Twenty percent will be withheld for federal income taxes, but this may not be sufficient to pay the taxes due. Upon request, STRS Ohio will withhold Ohio income tax.
  • Be a combination of the two payment options above.

Combined Plan participants can only select a PLOP payment at retirement for the defined benefit portion of their account, starting at age 60 or later.

Member Cost

The chart below shows the amount a monthly benefit is reduced for each $1,000 of lump-sum payment. For example, a 60-year-old member who receives a $10,000 lump-sum payment would have his or her benefit reduced $78.40 a month for life ($7.84 x 10 = $78.40).

Combined Plan
PLOP Cost Factor Table*
Age Reduction per $1,000
60 $7.84
61 $7.94
62 $8.04
63 $8.16
64 $8.29
65 $8.42
66 $8.57 
67 $8.73
68 $8.90
69 $9.08
70 $9.28

*These factors are also used for Defined Benefit Plan survivor benefit recipients who have elected a retirement-based benefit. Currently, this benefit is payable when a member dies before retiring with STRS Ohio but after meeting one of the following requirements: age 60 with five years of service credit; age 55 with 25 years of service credit; or any age with 30 years of service credit. The benefit takes into account years of service credit and final average salary. The reduction factor used is based on the age the member would have attained on the survivor benefit effective date.

Estimating PLOP Cost

A sample Partial Lump-Sum Option Plan (PLOP) Payment estimate appears below.

A 60-year-old member in the Combined Plan with a $2,000 per month Single Life Annuity (SLA) elects to take a partial lump-sum payment at retirement. This member is eligible to choose a lump-sum payment from $12,000–$72,000 (six–36 times the monthly SLA benefit). For this example, the member chooses a $30,000 lump-sum payment.

The cost per $1,000 of lump-sum payment for a member retiring at age 60 is $7.84 per month. This member’s monthly cost for a $30,000 payment is 30 x $7.84 or $235.20.

To determine the adjusted benefit, subtract $235.20 from the original $2,000 SLA. In this case, the member would receive $1,764.80 per month after the lump-sum payment. This member could then take a further reduction to provide survivor benefits through a Joint and Survivor Annuity or Annuity Certain. The member must choose a plan of payment which will be used to finalize the lifetime retirement benefit.

PLOP Estimate Worksheet — Combined Plan Participant
Retirement age of member in example: 60
Retirement date: July 1, 2014
Example:
$30,000 PLOP
I. Calculate PLOP range
1. Single Life Annuity (SLA) $2,000.00
2. SLA times 6 (minimum PLOP) $12,000.00
3. SLA times 36 (maximum PLOP) $72,000.00
4. Your PLOP amount (must be within minimum and maximum range) $30,000.00
II. Calculate cost of PLOP
5. PLOP reduction factor based on age at retirement (from PLOP cost factor table) $7.84
6. PLOP amount divided by $1,000 $30.00
7. Monthly cost of PLOP (line 5 x line 6) $235.20
III. Calculate PLOP-adjusted benefit
8. Single Life Annuity (SLA) $2,000.00
9. Cost of PLOP from line 7 $235.20
10. PLOP-adjusted SLA (line 8 - line 9) $1,764.80
11. Plan of payment option rate — the percent of SLA used to determine a Joint and Survivor Annuity or an Annuity Certain plan of payment* 90.94%
12. PLOP-adjusted plan of payment amount (line 10 x line 11) $1,604.90

*The plan of payment option rate may be found on retirement estimates you received from STRS Ohio.

Payment

Payment of Monthly Retirement Benefits

STRS Ohio issues retirement benefits on the first banking day of each month. Most service retirees who file a Service Retirement Application at least 30 days before their effective retirement date receive a partial monthly benefit payment on the date of their retirement.

Monthly retirement benefits are paid through direct deposit to the financial institution listed on the member’s Service Retirement Application and will be deposited to the members bank account on the first banking day of the month.

Payment of Lump Sum

The PLOP payment will be paid 91 days after your retirement date or the date all necessary information is received and your retirement benefit is finalized, whichever is later. 

A PLOP payment from STRS Ohio can be processed three ways. You can have:

    1. All of the PLOP payment paid by direct rollover to a traditional individual retirement account (IRA), a Roth IRA, an eligible employer plan or another qualified plan to avoid the immediate tax withholding and possible penalty.

    2. All of the payment paid directly to you.

    3. Some portion paid as a rollover with the remain­ing amount paid to you.

The PLOP payment will be electronically deposited to the same financial institution you listed to receive your monthly benefits, unless you elect to roll over the PLOP payment to a qualified plan. If you are married and elect to take a PLOP payment, spousal consent is required on your Service Retirement Application.

Items to Consider

The monthly benefit reduction due to the PLOP is permanent. Future benefit enhancements and cost-of-living increases, if eligible, will be calculated on the reduced benefit. Members should carefully consider the reduced benefit they will receive after taking the lump-sum payment to be sure they can still meet future financial obligations. Remember, the monthly benefit will be further reduced by federal and state taxes. If applicable, the following will also be deducted from the monthly benefit: health care premium (for STRS Ohio Health Care Program enrollees), dental and vision premiums and deductions for the optional retiree-funded death benefit.

The decision to take a lump-sum payment at retirement is a serious one and should be made with great care. Before considering a lump-sum payment, it is important to estimate how much it will reduce the monthly retirement benefit.

Before electing a PLOP, an individual counseling session with an STRS Ohio benefits counselor is strongly recommended.

Reemployment Violation and PLOP Payment

Reemployment in a public position in Ohio after retirement is restricted during the first two months following retirement. If you are employed by only one public employer at the time of retirement, you must wait two months after your date of retirement to return to public employment.

Retirees who return to public employment within two months after their retirement date must forfeit their monthly benefit for each month worked during the violation period. The amount a retiree forfeits by violating the two-month waiting period is the Single Life Annuity monthly benefit calculated before the reduction for a PLOP payment and a Joint and Survivor Annuity or Annuity Certain, if selected. The difference between the actual plan of payment selected and the pre-PLOP Single Life Annuity benefit will be deducted from future monthly benefits.

Special Tax Provisions

Before selecting a PLOP payment, it is important to understand the tax implications of receiving a lump sum at retirement as well as the restrictions on rollovers. Under federal tax laws, lump-sum payments paid directly to you that are eligible for rollover are subject to a mandatory 20% federal tax withholding. In addition, you may be subject to a 10% penalty for early withdrawal. This penalty does not apply if you withdraw the lump sum after you reach age 59-1/2, or you have separated from service and have taken payment in or after the year in which you turned age 55. If you are age 70-1/2 or older, you may be subject to the required minimum distri­bution rules established by the Internal Revenue Code and will not be eligible to roll over the entire PLOP amount.

A PLOP payment is also subject to Ohio income tax for residents of the state and may be taxable in the state of residence for non-Ohio residents. Upon request, STRS Ohio will withhold Ohio income tax from your PLOP payment. STRS Ohio is unable to withhold income tax for any other state. For further information regarding special tax provisions, consult your tax advisor.

If you elect a PLOP payment, a 1099-R form will be mailed to you in January of the year following your PLOP payment.

Sixty-day Rollover Option

If you initially choose to have a PLOP payment paid directly to you and later decide you want to roll it over to a qualified plan, you have 60 days after you receive the PLOP payment to do so. You can roll all or part of the PLOP payment to an eligible employer plan that accepts rollovers. The rollover will need to be done by you, not STRS Ohio. The portion of your payment that is rolled over will not be taxed until you take it out of the qualified plan.

You may roll over up to 100% of the eligible roll­over distribution (subject to IRS required minimum distribution regulations), including an amount equal to the 20% of the taxable portion that was withheld for federal tax. If you choose to roll over 100%, you must find other funds within the 60-day period to contribute to the qualified plan to replace the 20% that was withheld. Conversely, if you roll over only the 80% of the payment that you received, you will be taxed on the 20% that was withheld.

Purchasing Service Credit & PLOP

Many members are eligible to purchase service credit that will increase their monthly benefit. The availability of a PLOP can be a useful tool to help you determine if purchasing credit is worthwhile.

For example, assume you are planning to retire on or before July 1, 2015, at age 60 with 30.00 years of STRS Ohio credit and a final average salary of $50,000. Also assume you have certified your eligibility to purchase 3.00 years of STRS Ohio credit for private teaching service at a cost of $20,000.

As the example below shows, purchasing 3.00 years of private teaching service credit increases the monthly benefit $275.

Without the purchased credit, your monthly Single Life Annuity benefit (with 30.00 years of service credit) would equal $2,750:

Single Life Annuity Benefit (Without the Purchased Credit)
2.2% x 30 66%
$50,000 x 66% $33,000
$33,000 ÷ 12 $2,750

With the purchase of 3.00 years of service credit, your monthly Single Life Annuity benefit (with 33.00 years of credit) increases to $3,025:

Single Life Annuity Benefit (With the Purchase)
2.2% x 33 72.6%
$50,000 x 72.6% $36,300
$36,300 ÷ 12 $3,025

Members who are eligible to purchase service credit have three options regarding the purchase of their credit. They can purchase the credit and take no PLOP payment to maximize the monthly benefit, purchase credit and use the PLOP to replenish funds or retire without the purchase of additional credit.

Option 1 — Purchase Credit Without Electing a PLOP Payment

This option will provide the member with the largest monthly benefit. As shown in the example above, if the member purchases service credit without receiving a PLOP payment, the monthly benefit is $3,025.

Option 2 — Purchase Credit and Use PLOP Payment to Replenish Funds

This option allows a member to use a PLOP payment to replenish funds that were used to purchase credit. The monthly reduction for the PLOP payment may be less than the increase resulting from the purchase. For example, the PLOP reduction for the 60-year-old Defined Benefit Plan member (retiring July 1, 2014) in the example above is $7.09 for each $1,000 of PLOP payment. Therefore, a $20,000 PLOP payment would result in a $142 (20 × $7.09) monthly reduction. As noted earlier, the purchase of this member’s three additional years of service credit resulted in a monthly increase of $275. After taking a $20,000 PLOP payment, this member would have a net monthly increase of $133 ($275 – $142).

All purchasable service credit must be certified and a cost statement issued before your retirement date and purchased within three months after your retirement date. PLOP payments will be paid 91 days after your retirement date or the date all necessary information is received and your retirement benefit is finalized, whichever is later.

Because credit must be purchased before the PLOP payment is issued, you must use funds from some other source to purchase credit and use the PLOP payment to replenish those funds. There are two ways you can use the PLOP payment to replenish funds used to purchase credit:

  1. You can roll money from an IRA, qualified plan or eligible employer plan to purchase credit and take a PLOP payment to cover the amount needed to replenish the account.
  2. You can take a PLOP payment to pay yourself back directly for any service credit purchased. You will need to request a PLOP payment amount that also covers the taxes that will be withheld on payments paid directly to you. See the "Special Tax Provisions" information under "Items to Consider" above.

Option 3 — Retire Without the Purchase of Additional Credit

Members may have reasons to not purchase eligible credit. For example, a member may not want to use limited personal savings. In addition, a member may not want to take a PLOP payment if the minimum payment is considerably larger than the cost of the service, and the monthly benefit after taking the minimum PLOP payment will be a lower monthly benefit. For example, a member may be eligible to purchase one year of service that would increase the monthly benefit by $90; however, the minimum PLOP payment may cause a $150 reduction, resulting in a net decrease of $60.

Changes to Purchasing Credit

Effective Jan. 1, 2014, members will be required to pay the full projected liability created by the purchase of out-of-state teaching or public service, private teaching, government service, military service, National Guard/reserve military service, other Ohio public service, leave of absence due to pregnancy, waived Ohio public service and school board service. Members who file all necessary forms for certification by Dec. 31, 2013, may purchase the credit by June 30, 2014, at the current rates.

Payout Options

 

Combined Plan participants have several payment options available to them when they end their teaching career in Ohio for their defined contribution and defined benefit accounts. Click the option below for more information on each option.

Defined Benefit Account

If you elect monthly benefits at retirement, you will select a plan of payment from among several different actuarially equivalent plans. For your defined benefit and defined contribution payments, you may elect a different plan of payment and beneficiary for each benefit. All plans provide you with lifetime benefits but vary in the protection 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 four basic plans of payment:

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

Plan I — Single Life Annuity

The Single Life Annuity plan provides maximum monthly benefits for your lifetime. This plan does not provide any payment to a survivor upon your death. Upon electing a Single Life Annuity, your defined contribution account balance is converted to a lifetime 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 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 the first of the following month.

Plan II — Joint and Survivor Annuity

Under the Joint and Survivor Annuity, you receive a 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).

Upon electing a Joint and Survivor Annuity, your defined contribution account balance is converted to a lifetime annuity for you and your primary beneficiary(ies). There is no refundable amount or payment if the total annuity payments are less than the converted defined contribution account balance.

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 following 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 benefit protection 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 is no longer protected.

Multiple primary beneficiaries

Option 4:
Members who retire Nov. 1, 2006, or later, may elect a reduced benefit from the defined benefit portion of their account 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 amount 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. Benefits paid to the other beneficiaries will not change.

If you select this choice, you may change only your plan of payment 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 following month.
  • All beneficiaries named at retirement 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 is protected 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 is no longer protected.

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.

Plan IV — 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 based on the defined benefit portion of the account only 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.

Click here for more information on the Partial Lump-Sum Option Plan.

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 plans of payment:

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

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

Without a spousal consent for the plans listed above, a Joint and Survivor Annuity with one-half to beneficiary with reversion will be automatically selected for you.

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.

Defined Contribution Account

Combined Plan participants have several payment options available for the defined contribution portion of their account when they end their teaching career in Ohio.

Members who are age 50 or older may withdraw the entire defined contribution portion of their account and retain the defined benefit portion. They may withdraw the defined benefit portion only if they are also withdrawing the defined contribution portion.

Important Note for Members Who Have Selected the STRS Total Guaranteed Return Choice as an Investment Option
Members who leave teaching and elect to “withdraw” their STRS Total Guaranteed Return Choice account before the end of a five-year term will be assessed an early-term withdrawal penalty of 10% of their net asset value (NAV) on all funds that did not go to term.

Click the link below for more information on each option available for your defined contribution account.

Life Annuity

Under an annuity plan, your monthly benefit is based on life expectancy factors and the amount you annuitize. There are three basic plans of payment:

  • Plan I — Single Life Annuity
  • Plan II — Joint and Survivor Annuity
  • Plan III — Annuity Certain
Plan I — Single Life Annuity

The Single Life Annuity plan provides maximum monthly benefits for your lifetime. This plan does not provide any payment to a survivor upon your death. Upon electing a Single Life Annuity, your defined contribution account balance is converted to a lifetime 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 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 the first of the following month.

Plan II — Joint and Survivor Annuity

Under the Joint and Survivor Annuity, you receive a 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.
  • Option 4 applies to multiple primary beneficiaries.

Upon electing a Joint and Survivor Annuity, your defined contribution account balance is converted to a lifetime annuity for you and your primary beneficiary(ies). There is no refundable amount or payment if the total annuity payments are less than the converted defined contribution account balance.

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 following 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 benefit protection 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 is no longer protected.

Multiple Primary Beneficiaries

Option 4
Members who retire Nov. 1, 2006, or later, may elect a reduced benefit from the defined benefit portion of their account 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 amount 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. Benefits paid to the other beneficiaries will not change.

If you select this choice, you may only change your plan of payment 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 following month.
  • All beneficiaries named at retirement 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 is protected 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 paid.

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

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.

Lump-Sum Withdrawal (Including Rollovers to Traditional IRAs or Other Employer Plans)

Your total account balance is paid in one payment. This includes rollovers to traditional IRAs or other employer plans. This is your only option if you are under age 50.

Members participating in the Combined Plan who are age 50 or older may withdraw the entire defined contribution portion of their account and retain the defined benefit portion with STRS Ohio for a monthly benefit payable at age 60 with five years of service credit. They may withdraw the defined benefit portion only if they are also withdrawing the defined contribution portion.

Important Note for Members Who Have Selected the STRS Total Guaranteed Return Choice as an Investment Option
Members who leave teaching and elect to “withdraw” their STRS Total Guaranteed Return Choice account before the end of a five-year term will be assessed an early-term withdrawal penalty of 10% of their net asset value (NAV) on all funds that did not go to term.

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 plans of payment:

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

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

Without a spousal consent for the plans listed above, the Joint and Survivor Annuity with one-half to beneficiary with reversion will be automatically selected for you.

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.

Spousal Consent on Account Withdrawals

If you are married, at least age 50 and are eligible to withdraw a balance of at least $5,000, 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.

Legislation effective Jan. 1, 2002, authorizes a court in the State of Ohio that grants a termination of marriage to issue a division of property order (DOPO) to STRS Ohio. A DOPO requires STRS Ohio to pay a portion of a retirement benefit or refund that is payable now, or in the future, to a member’s former spouse at the time payment is made to the member. If you have questions about how this new law relates to a termination of your marriage, please contact your attorney.

Taxation of Retirement Benefits

Federal Income Tax

Beginning with the first payment, STRS Ohio retirement benefits are taxable. If you paid taxes on some of your contributions, a small percentage of your benefit will be tax-free until your taxed contributions are exhausted. For example, if you paid taxes on $25,000 of contributions and the IRS determines these contributions are to be spread over 25 years, you will receive $1,000 tax-free for the first 25 years of your retirement. Information regarding any amount excludable from tax will be sent to you shortly after your retirement account is finalized and will be reflected on the 1099-R form sent to benefit recipients following the end of the calendar year.

We will withhold federal taxes from your benefits unless you direct otherwise. If federal taxes are not withheld, you will be responsible for filing federal quarterly estimates.

Under federal tax laws, a PLOP payment that is eligible for rollover, but is paid directly to you instead, is subject to a mandatory 20% federal tax withholding. In addition, you may be subject to a 10% penalty for early withdrawal. This penalty does not apply if you withdraw the lump sum after you reach age 59-1/2, or you have separated from service and have taken payment in or after the year in which you turned age 55.

Ohio Income Tax

The taxable portion of a retirement benefit or a PLOP payment paid directly to you is subject to Ohio income tax for Ohio residents. On request, we will withhold Ohio income taxes.

Income Tax — Other States

If you are a resident of another state, your state tax liability is governed by the laws in that state. STRS Ohio cannot withhold tax for states other than Ohio.

Local or Municipal Taxes

STRS Ohio retirement benefits are exempt from local or municipal taxes in Ohio.

School District Income Tax

STRS Ohio retirement benefits may be subject to local school district income taxes in Ohio. Some districts in Ohio have a provision where the school district income tax applies to earned income only. We are not authorized to withhold this tax from retirement income unless the benefit is affected by a Qualified Excess Benefit Arrangement (QEBA). STRS Ohio informs members who are affected by a QEBA.

Click here to view more information on taxes and your STRS Ohio benefit including federal and Ohio tax tables.

Taxable Income

Following the end of the calendar year, benefit recipients receive a 1099-R form for monthly benefits showing “annual gross benefits” and “taxable amount” as computed by STRS Ohio.

If you elect a PLOP payment, a 1099-R form will be mailed to you in January of the year following your PLOP payment.

For more details about taxation of benefits, contact the Internal Revenue Service, the Ohio Department of Taxation or a qualified tax consultant. STRS Ohio cannot provide tax advice.

Important Tax Considerations for Lump-Sum Withdrawals

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 it is received.
  • We will withhold 20% of the payment and send it to the IRS to be credited against your taxes.
  • 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 income tax will be withheld.
  • Your withdrawal will be paid directly to an account or fund that will accept your rollover.
  • Your payment will be taxed when it is removed from your account or fund.

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 payment” 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 brochure titled Account Withdrawal and consult a professional tax advisor for more information. STRS Ohio cannot provide tax advice.

How to Apply for Service Retirement Benefits

 

As a Combined Plan member, your effective retirement date for the defined contribution portion of your account is the first of the month following the latter of:

  • Month in which you become age 50,
  • Last day of actual employment in an STRS Ohio-covered position, or
  • Month in which you apply.

For the defined benefit portion, your effective retirement date is the first of the month following the latter of:

  • Month in which you become age 60, or
  • Last day of actual employment in an STRS Ohio-covered position.

To apply for retirement, request a Service Retirement Application from STRS Ohio at least three months, but no later than 12 months before retirement. Provided you have submitted an application at least 30 days before your retirement date, we will issue a benefit payment on your retirement date. If the actual benefit amount is not finalized by your retirement date, a partial payment will be issued. When the actual benefit amount is determined, any adjustments will be made retroactive to your effective date of retirement.

Remember, you must file a separate retirement application for the defined benefit and defined contribution portions of your account.

How to Apply for Disability Benefits

 

To qualify for disability benefits, an STRS Ohio member must:

  • Meet either of the following:

    — Existing members on June 30, 2013, must have at least 5.00 years of service credit on account with STRS Ohio and submit a completed application packet within two years of the last date of earned service.

    — New members on or after July 1, 2013, must have at least 10.00 years of service credit on account with STRS Ohio and submit a completed application packet within one year of the last date of earned service.

    The one- or two-year deadline to file an application does not apply if the State Teachers Retirement Board determines the member’s medical records demonstrate conclusively that at the time the one- or two-year period expired, the member was physically or mentally incapacitated from their most recent job duties and unable to apply for disability.

  • Have not withdrawn any portion of the account.
  • Not be receiving service retirement benefits.

In lieu of receiving monthly disability benefits from STRS Ohio, members may terminate employment and withdraw their defined benefit and/or defined contribution portions.

Medical criteria

The medical criteria for disability benefits are that a disabling injury or illness prevents the individual from performing his or her most recent job duties and the condition is expected to last at least 12 months from the date STRS Ohio receives the completed Disability Benefit Application.

Applying for Disability Benefits

If you qualify for a disability benefit contact STRS Ohio toll-free at 1-888-227-7877 to have a disability application packet sent to you.

The member should apply for disability benefits in a timely manner to avoid exhausting sick leave before the application process is complete. (Due to the number of different review processes, members should allow at least four to six months for consideration of a disability application.) Listed below are the steps to follow when applying for disability benefits.

  1. Member contacts STRS Ohio to request a disability application packet, which includes the following:
    • Disability Benefit Application
    • Report by Employer for a Disability Benefit Applicant
    • Attending Physician’s Report
    • Disability Application Checklist
    • Questions-and-Answers booklet
  2. All forms included in the packet must be completed before processing of your application begins. The Report by Employer for a Disability Benefit Applicant form should be returned to STRS Ohio by the employer with a copy of your most recent official job description. The applicant is also responsible for submitting any medical evidence including hospital records or test results from the last 12 months that support the disabling condition.

    For a condition to be evaluated as part of the disability application process, a report from a physician (M.D. or D.O.) must be received with the application packet. The physician must certify on the report that the condition is and will continue to be disabling for at least 12 months from the date the application is received by STRS Ohio.

    Note: The member’s spouse or a person acting on the member’s behalf may also file the application. The member must complete the Authorization for Release of Retirement Account Information form and submit it to STRS Ohio before the disability application can be discussed with a family member or any other individual representing the member.

  3. Member is examined by an independent medical examiner located in the Columbus, Ohio, area and chosen by STRS Ohio. STRS Ohio pays the examiner’s fee, but not the member’s travel expenses.
  4. STRS Ohio’s Medical Review Board may recommend a period of medical treatment for up to six months before a recommendation is made to the State Teachers Retirement Board.
  5. The Medical Review Board evaluates the applicant’s medical records and makes a recommendation to the Retirement Board.
  6. If the Medical Review Board recommends approval of the application, the member must stop working by the end of that month.
  7. Retirement Board determines whether the application for disability benefits is approved.
  8. STRS Ohio notifies the member of the Retirement Board’s decision.
  9. If the disability application is approved, STRS Ohio requests final average salary and service credit information from the member’s employer to calculate the benefit payments. (Allow at least 90 days from the approval date to receive the first benefit payment.)
  10. If the disability application is not approved, information about the appeal process is mailed to the applicant.

For additional information about the disability process, or if you have questions, contact STRS Ohio via email or toll-free at 1-888-227-7877. Please note that email submissions on this site are unsecured, so only include your name, the last four digits of your Social Security number or STRS Ohio account number with your message.

How to Apply for Survivor Benefits

 

Qualified survivors of STRS Ohio members may be eligible for monthly survivor benefits from STRS Ohio. Existing members as of June 30, 2013, must have at least 1.50 years of service credit before death. New members on or after July 1, 2013, must have at least 5.00 years of service credit before death. Please contact STRS Ohio toll-free at 1-888-227-7877 to apply for survivor benefits.

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