The Ohio Retirement Study Council, the Ohio public retirement systems and outside actuaries have worked collaboratively to study the financial impact of alternative retirement plans (ARPs) on the retirement systems, specifically the mitigating rate. ARPs were originally offered as an alternative to the STRS Ohio Defined Benefit Plan in 1997. At that time, Ohio law deemed a percentage of the employer contribution (know as the mitigating rate) is necessary to mitigate any negative financial impact of the alternative retirement plans on the state retirement systems.
Mitigating contribution payments to STRS Ohio go toward meeting the employer's proportionate share of the unfunded accrued liability. Recently passed into law, House Bill 520 includes a new method for calculating the mitigating rate, places a 4.5% maximum on the rate and requires that the rate be reviewed every five years.
The mitigating rate, paid by college and university employers to STRS Ohio on behalf of ARP participants, will change to 4.47% from 4.5% effective July 1, 2017. Employers must implement the necessary changes to ensure that 4.47% of employer contributions for ARP participants are remitted to STRS Ohio for earnings on or after July 1, 2017. Employer ARP reports must reflect the new rate starting with the July 2017 report, due to STRS Ohio by Aug. 15, 2017.
If you have any questions, please contact your employer account representative, Jim Peterman, at 888‑535‑4050 (toll-free) or [email protected].