Frequently Asked Questions

What is considered compensation for STRS Ohio purposes?

Compensation is salary, wages and other earnings paid to an employee, including amounts paid for a supplemental contract.

What payments are excluded from compensation for STRS Ohio purposes?

The following types of payments are examples of payments not subject to STRS Ohio contributions.

What is the effect of employee benefit cafeteria plans on compensation?

Cafeteria plans do not change the base compensation for retirement contributions. The basis for member and employer contributions is the salary specified by the contract or salary schedule.

If employees who do not participate in the school’s health care plan receive an extra payment, is this considered compensation?

No. Payments made to provide insurance of any kind, or payments made in lieu of insurance, are not considered compensation for STRS Ohio retirement contribution purposes.

Are tax-sheltered annuities considered compensation?

Annuities paid on behalf of members are considered compensation for STRS Ohio purposes if they are part of the employee’s compensation for services and are not excluded for some other reason, such as an annuity in lieu of insurance benefits. These annuity payments should be treated as supplemental compensation, and STRS Ohio contributions must be made for the fiscal year in which annuity payments are earned.

Are payments for Medicare taxes considered compensation?

No. If an employer pays or reimburses any part of a member’s Medicare tax, that amount should not be included in the member’s compensation for STRS Ohio purposes.

Are retroactive increases considered compensation?

Retroactive increases are not usually subject to STRS Ohio compensation. However, these increases may be subject to STRS Ohio contributions if they are granted to: all teachers, all administrators; or, a superintendent, provided all teachers also received the retroactive increase.

Are bonuses, such as merit, longevity, sign-on and retention, considered compensation?

Bonuses are generally considered compensation for STRS Ohio purposes, as long as they are earned by reason of employment. However, a bonus may be excluded from compensation if it is retroactive, attributable to retirement or paid in lieu of items not considered STRS Ohio compensation. Please contact an STRS Ohio employer advisor about whether a specific bonus is included in compensation.

Should retirement contributions be deducted from a district’s settlement payment with an employee?

All settlements must be reviewed by STRS Ohio before remitting contributions on these types of payments. Please contact your employer advisor and submit a copy of the agreement for review. If the settlement is based on punitive damages rather than compensation for actual work performed, then STRS Ohio cannot accept contributions on the payment.