The mitigating rate, established by law, is a portion of the employer contribution that is used by the retirement system to offset the negative impact of participation in a defined contribution plan or an alternative retirement plan (ARP).
As previously communicated, at its April 2015 meeting, the Retirement Board approved a 1% increase in the mitigating rate for STRS Ohio’s Defined Contribution (DC) Plan participants. The increase was to be phased in over two years beginning July 1, 2015, and by operation of law would have also applied to higher education faculty who participate in an ARP.
A recent legislative initiative sought to modify STRS Ohio’s increase in the mitigating rate for ARP participants. To provide an opportunity for STRS Ohio to work with the legislature on a long-term agreement on the mitigating rate, the Retirement Board voted at its June meeting to amend its April 2015 action that increased the mitigating rate. The board action means the mitigating rate for DC Plan and ARP participants will remain for now at 4.5%.
As a result, higher education employers should continue remitting ARP reports at the 4.5% rate with the July 2015 ARP report. If you have questions, please contact your payroll reporting representative toll-free at 888‑535‑4050.